Jamie Dimon is Barking Up the Wrong Tree

My colleague David Reilly has written an interesting Heard column drawing attention to recent comments by JP Morgan boss Jamie Dimon in which he complains that European banks are gaming the Basel 2 capital rules to boost their reported capital ratios.

He questioned differences in models other banks use to calculate risk-weighted assets that help determine Tier 1 ratios. A comparison of J.P. Morgan’s risk-weighted assets to peers suggests their approach “can’t be accurate,” Mr. Dimon said at his bank’s investor-day conference last month. “I mean, obviously, someone’s using far more aggressive models.” Although Mr. Dimon didn’t single out particular institutions, it appears he was pointing a finger at Europe.